Hedgeweek Comment: Fink leaves but may still seek alpha
Last week, Man Group, the world's largest listed hedge fund manager, announced that its pre-tax profits had soared by 60 per cent to USD2.1bn for the financial year ending on March 31, as its income from performance fees more than doubled and management fees grew by 21 per cent.
But the main news was that hedge fund veteran Stanley Fink was stepping down as deputy chairman a little more than a year after assuming a non-executive role. Fink, the previous chief executive of the FTSE 100 company and an influential figure in the European hedge fund industry, will be leaving the company in July after 21 years.
Meanwhile Fink's successor as chief executive, Peter Clarke, says Man plans to use its cash stockpile to buy smaller rivals and hire new talent to expand its offerings in Asia and in multi-strategy funds. He sees buying opportunities as hedge fund management company prices come down, while the credit crunch has knocked out potential rival bidders.
Man Group is doubling its annual dividend and recommencing a share buyback programme that was suspended last July. The latest profits, which beat analyst expectations by around 5 per cent, are a strong indication that alternative investment strategies can achieve good returns despite the financial crisis.
And while Fink has signalled his exit, he is still understood to own directly 9.5 million shares of the group, worth GBP58m. With takeovers on the horizon, it could be that Fink will have some input on future transactions - because for hedge funds, or hedge fund executives, it's all about alpha.
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